These Christmas cream cheese sugar cookies are the most pillow soft cut out cookies. These cookies are made with cream cheese to make them extra creamy and soft. They are topped with a cream cheese frosting that will set firm, which makes it perfect for those Christmas cookie boxes!

Top view of cream cheese sugar cookies on a wood board.

Quick Look: Cream Cheese Sugar Cookies

  • What it is: Cut out sugar cookies that just melt in your mouth, topped with cream cheese frosting.
  • Why Make THIS Version? The cream cheese frosting sets firm, which makes them stackable and easier to transport.
  • Key Ingredients: Cream cheese, butter, and sugar.
  • Calories Per Serving: 198kcal.
  • Total Time: 2 hours and 47 minutes, but 2 hours is for chilling time.
  • Pairs Well With: Hot chocolate, coffee, and a glass of milk for Santa.
Stephanie headshot in black shirt with coffee cup.

Why You Will Love These Cream Cheese Sugar Cookies

  • Pillow soft sugar cookies- Since there is cream cheese in the cookie dough, it makes for these creamy sugar cookies that melt in your mouth.
  • Cream cheese frosting- This frosting uses cornstarch which will act as the “drying” agent to help firm the frosting.
  • Make ahead cookies- if you are making Christmas cookie recipes, you can make the dough and cookies ahead of time.
— Stephanie

Ingredient Notes

Ingredient photo.

The full recipe with measurements & directions can be found in the recipe card at the bottom of this post.

  • Butter: Use unsalted butter for best results. Salted butter has extra water, which can lead to more of a spread.
  • Cream Cheese: Use full fat Philadelphia cream cheese for best results.
  • Egg and Egg Yolk: Instead of two full eggs, the goal is to reduce spread, so I used an egg yolk instead which lowers the wet ingredients.
  • Cornstarch: The cornstarch is necessary if you want to dry out the frosting so it sets.

How to Make Cream Cheese Sugar Cookies

Cookie dough in a bowl.
  1. First, make the cookie dough by beating the butter, cream cheese and sugar together. Then, add the vanilla, egg and egg yolk. Finish by mixing in the flour mixture. It makes a thick and sticky dough.
Cookie dough wrapped up on a cookie sheet.
  1. Split the cookie dough in half, and wrap each in plastic wrap. Store on a cookie sheet and in the fridge for at least 2 hours.
Cut out cookie dough on a cookie sheet.
  1. Roll the cookie dough out to a 1/3-1/2 inch rectangle, cut the cookies out. Reroll the scraps once to get more cookies. If you want sugar cookies that aren’t cut out, my Christmas sugar cookies are super chewy!
Baked cookies on a wire rack.
  1. Bake the cookies at 350F for 8-9 minutes until lightly golden. Then, make the cream cheese frosting and decorate.

Stephanie’s Expert Baking Tips

  • Dough texture: the dough will be sticky and tacky, this is expected because of the cream cheese. However, after it chills, it can be rolled easily.
  • Roll the dough: I tried rolling the dough with both a floured surface and using parchment paper. I use this method in my gingerbread cookies. The parchment paper prevents the cookie dough from overly sticking and getting stuck.
  • Decorating: I found the best way to decorate is put frosting in a piping bag with 1A piping tip and pipe a big dollop of frosting on the cookie. Then, I used an offset icing spatula to spread the frosting before immediately adding sprinkles.
  • Setting the frosting: The frosting sets after about 2 hours.

Serving + Storing

The cookies can be served immediately after eating. However, if you want to store them wait 2 hours after icing for the icing to dry. Then, store in an airtight container in the fridge for up to 5 days.

Cream Cheese Sugar Cookies FAQ’s

Can the dough for cream cheese sugar cookies be frozen?

Yes it can! After you wrap in plastic wrap, you can freeze for up to 30 days. Then, set it on the counter for an hour to thaw enough to roll it out.

Can the decorated cream cheese sugar cookies be frozen?

Yes they can! After the frosting sets, place in the freezer for up to 30 days.

What does adding cream cheese do to the cream cheese sugar cookies?

It changes both the flavor and texture. The cream cheese helps to cut down on the sweetness, making a more balanced cookie. The cream cheese also adds moisture which makes them melt in your mouth.

Bite missing from one cream cheese sugar cookie.

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Top view of cream cheese sugar cookies on a wood board.
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Christmas Cream Cheese Sugar Cookies

These are cut out cream cheese sugar cookies perfect for Christmas. They taste like pillow soft sugar cookies with cream cheese frosting that does dry and set.
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Ingredients
 
 

Sugar Cookies

  • 3 1/2 cups All-purpose flour
  • 1/2 tsp Baking soda
  • 1/2 tsp Baking powder
  • 1 tsp Salt
  • 1 cup Unsalted butter, room temperature
  • 6 oz Cream cheese, room temperature
  • 1 1/2 cups White granulated sugar
  • 1 Large egg, room temperature
  • 1 Egg yolk, room temperature
  • 1 TBSP Pure vanilla extract

Cream Cheese Frosting

  • 1 cup Unsalted butter, room temperature
  • 4 oz Cream cheese, room temperature
  • 4 cups Powdered sugar, sifted
  • 1 tsp Pure vanilla extract
  • 2 tsp Cornstarch
  • Pinch of salt

Instructions
 

Sugar Cookies

  • In a medium bowl, sift the flour, baking soda, baking powder, and salt. Set aside.
    3 1/2 cups All-purpose flour, 1/2 tsp Baking soda, 1/2 tsp Baking powder, 1 tsp Salt
  • Using a mixer in a large bowl, beat the butter, cream cheese, and sugar on high speed for 2 minutes. It will look really fluffy.
    1 cup Unsalted butter, 6 oz Cream cheese, 1 1/2 cups White granulated sugar
  • Add in the egg, egg yolk, and vanilla. Mix on medium speed until combined. It will look like cake batter. Add in the flour mixture and mix on low until just combined. Take off the mixer and use a rubber spatula to scrape the bowl to make sure it is all mixed together.
    1 Large egg, 1 Egg yolk, 1 TBSP Pure vanilla extract
  • Split the dough in half. Place each half dough on parchment paper, use your hands to press it into an 1 inch thick rectangle. Then, wrap it up well with plastic wrap. (Parchment paper is to avoid the dough sticking to the counter).
  • Place on a cookie sheet and in the fridge to chill for at least 2 hours or overnight.
  • Preheat the oven to 350℉. Take one of the halves, and place it back on parchment paper. Roll it out to 1/3 to 1/2 inch thick. Use cookie cutter to cut out the dough. Place cookies on a cookie sheet with parchment paper. I used 3 total cookie sheets.
  • Roll the scraps one time, any more and it can cause the cookies to be tough, and cut out more cookies. Repeat with the second cookie dough.
  • Place the first cookie sheet that will go in the oven, in the freezer for 10 minutes to quickly chill the dough. Place the rest of the cookies in the fridge.
  • Bake for 8-9 minutes, they will be lightly golden on the edges and underneath. Let the cookies sit on the hot pan for 3-4 minutes.
  • Transfer the cookies to a wire cooling rack. Cool completely before decorating.

Cream Cheese Frosting

  • In a medium bowl, sift the powdered sugar. Add in the cornstarch and pinch of salt. Set aside.
    4 cups Powdered sugar, 2 tsp Cornstarch, Pinch of salt
  • Using a mixer in a large bowl, beat the butter on high speed for 2 minutes. Add in the cream cheese and mix on high speed for 1 minute. Scrape the bowl.
    1 cup Unsalted butter, 4 oz Cream cheese
  • Add in the powdered sugar and mix on low speed until just combined. Add in the vanilla and mix on high speed until creamy. Optional: you can separate the dough into bowls and use gel food dye to get different colors.
    1 tsp Pure vanilla extract
  • Frost the cookies and top with sprinkles immediately. Otherwise the frosting will start to set the sprinkles won't stay.

Notes

Flour- Make sure flour is spooned and leveled or use a kitchen scale. Compacted flour can dry out the cookies and cause them to not spread enough.
High altitude baking- Add an extra 3 TBSP of flour.
Pull out dairy ingredients 2 hours before baking.
Calories: 198kcal, Carbohydrates: 32g, Protein: 2g, Fat: 13g, Saturated Fat: 8g, Polyunsaturated Fat: 1g, Monounsaturated Fat: 3g, Trans Fat: 0.4g, Cholesterol: 40mg, Sodium: 112mg, Potassium: 28mg, Fiber: 0.3g, Sugar: 9g, Vitamin A: 428IU, Calcium: 17mg, Iron: 1mg
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